Bill · H.R. 4740· House(119-HR-4740)
No Tax on Overtime for All Workers Act
- Introduced
- 7/23/2025
- Last activity
- 7/23/2025 — Referred to the House Committee on Ways and Means.
- Sponsored by
- Emilia Sykes
- Cosponsors
- - 1 - 0
- Introduced
- In Committee
What this bill would do
This bill, titled the "No Tax on Overtime for All Workers Act," proposes to amend the Internal Revenue Code of 1986. It seeks to allow a deduction for certain types of overtime compensation. This compensation includes pay required under the Fair Labor Standards Act of 1938 that exceeds an individual's regular rate. It also covers pay that is at least one and one-half times the regular rate for work exceeding a standard number of hours, provided there is a specific type of agreement in place. The changes would apply to taxable years starting after December 31, 2024.
Yes· 3 of 5
Would middle-income households be better off under this?+5
The bill reduces the taxable income of workers earning overtime pay, increasing their take-home pay.
Does this cut taxes for middle-income families?+5
The bill allows workers to deduct overtime pay from their taxable income, effectively lowering their tax burden.
Would households on low incomes be better off under this?+4
The deduction provides direct financial relief to workers receiving overtime pay.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
-
Tax Deduction for Overtime Pay: The bill allows for a deduction of "qualified overtime compensation" (Section 2, subsection a). This could provide a financial benefit to workers by allowing them to deduct pay earned in excess of their regular rate from their taxable income.
-
Protection for Standard Work Weeks: Under the provision for agreements, the bill ensures that any standard number of hours specified must be not less than 40 hours for a 7-day work period (Section 2, subsection a, part B, subpart II). This provides a clear standard for those using the compensation types described in the second part of the law.
Potential Negative Impacts for People
- Requirement of Specific Agreements: To qualify under one part of the bill, compensation must be paid based on an agreement that was entered into before the work was performed (Section 2, subsection a, part B, subpart I). This means workers or employers must have specific, pre-arranged agreements in place to utilize this particular type of compensation deduction.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Middle Class Households+5Good For Low Income Households+4Good For Union Workers+4
- Economy And Finance
- Reduces Middle Class Taxes+5Improves Union Protections+3
- 1/13/2026
- 1 Cosponsor added.
- 7/23/2025
- Referred to the House Committee on Ways and Means.
- Introduced in House
James WalkinshawDemocrat · Virginia